tor (by special agreement with the grantee or nonprofit con- 23 D. USE OF PATENTS BY PARTIES RETAINING TITLE 1. Employees HEW has no information showing the use of patents to which employees have retained title. Employees of HEW have retained title to patents in very few cases, and only in those where Government materials, time or information has not contributed to an invention, or where the Government has insufficient interest in the invention. Under such circumstances HEW does not collect information on inventions of this type. 2. Contractors and grantees To date there are two instances in which the Surgeon General had been requested to approve, and did approve, a disposition of grantee inventions which involved an assignment or exclusive license. The inventors were Dr. Harry S. Penn, of the University of California and Dr. Russell H. Morgan, of Johns Hopkins University. In both of these cases there was a strong showing of need of substantial additional investment in order to continue research and development to the point of wide utility. The facts in these cases are briefly as follows: Dr. Harry S. Penn, University of California This invention was described as a "synthetic antigen for use in detection of cancer." The invention resulted from research which had been supported by contributions from several sources. Prior to the granting of an exclusive license, the Government had contributed approximately $87,000 from 1949 to 1953. During this period support from non-Federal sources had been approximately $143,000. The grantee institution claimed that it was unable to continue the necessary research work except by accepting an offer from a private drug firm, which was willing to contribute approximately $55,000 for continued research for several years together with the assistance of qualified technicians. This offer of the drug company was conditioned upon its receiving a 5-year exclusive license with a limit of 5 percent of net sales on any royalty charge. This arrangement was approved by the Surgeon General in March 1953, and in April 1958 a license to the Government was received under the pending patent application. In January 1959 the university notified HEW that is was abandoning all of its rights to the invention on conditions that the inventor fulfill his obligations to the Government. Dr. Russell H. Morgan, Johns Hopkins University This invention involved low noise amplification and was first reported to the Public Health Service in March 1955. The research work leading to the invention was supported over a period of several years by contributions of approximately one-third by the university and two-thirds by the Public Health Service. The work was directed primarily toward amplification of X-ray fluoroscopic screens. In See note 5 on p. 4. November 1955, because of the need for further highly technical development to be undertaken by a private firm and after receiving abundant assurances that vigorous efforts would be devoted to developing the invention, the first priority being given to the field of medicine in public health, the Surgeon General determined that this firm could hold the patents until April 1965. Upon the expiration of this period of exclusivity, the owner of the patent is required to grant licenses on a nonexclusive basis with royalties limited to 6 percent, and the Government is entitled at all times to a nonexclusive, irrevocable royaltyfree license, with power to sublicense for governmental purposes. HEW has no data showing the use which grantees have made of patents which they obtained. No patent has yet been issued to which a contractor has title. In connection with inventions arising out of grants, HEW stated: *** the inventions developed under grants have for the most part also been dedicated by publication or, if covered by agreement with universities, the extent of actual use would be peculiarly the knowledge of the university." 3. Government HEW has a definite policy of discouraging the acquisition and/or ownership of patents by the Government except (1) in the case of inventions of high potential significance to public health, safety, or welfare when it is deemed advisable to obtain maximum protection against potential rival claims by establishing priority of invention and diligence in reducing to practice, and (2) for reasons of health and safety when it is determined to be advisable to have legal authority to impose restrictive conditions on the use of the patents. The present policy of HEW strongly leans toward dedication to the public, not only in the case of patented inventions, but also in the case of patentable inventions which were dedicated without making patent applications. The only patentable invention reported to HEW pursuant to a research contract is now in process of being dedicated to the public. As long as this dedication policy is continued, there will be very little need for granting licenses. A tabulation showing, as of May 1959, all patents owned by HEW under which licenses were granted, giving patent number, dates of issue, subject matter of invention, name and address of licensee, date of license, and the name and status of the inventor appears in the appendix at page Two examples of dedicated inventions which HEW believes may have had extensive commercial use are the following: An example of an important invention on which a patent was obtained was that of a "Method of Converting Tomatidine into ▲ 16 Allopregnenolone" by a team of research workers at the National Institutes of Health. As soon as report was made of the success obtained in this research effort, numerous inquiries were received concerning the availability of the invention for commercial use. Accordingly, after the patent issued, determination was made to dedicate the patent to the public. Formal dedication was recorded in the Patent 24 See note 5 on p. 4. Office, and those who had inquired about licensing were no- An example of an unpatented invention made by a Department employee and having substantial commercial utility was the invention in 1953 of the new insecticide "DDVP" by a team of research workers at the Technical Development Laboratories of the Public Health Service Communicable Disease Center. This invention was significant both in the field of agriculture and of public health, and as soon as reports concerning it appeared inquiries were received from a number of commercial organizations. The Department determination was in favor of technical publication, rather than patenting, and press releases were issued for the information of the public as to its potentialities and its availability for use. *** 25 No reports have been obtained from any HEW licensee showing the extent of commercial use. Three examples of licensed patents were submitted as having probable commercial uses. These were: 2,178,010-Nuclear substituted derivatives of the morphine series. "Metropon" licenses to eight drug and chemical companies. 2,234,981-Formaldehyde sulphoxylate derivatives. Licenses to four drug and chemical companies. 2,604,474 "Primaquine." Licenses to five drug and chemical companies. (This highly useful invention was developed under a Public Health Service research grant to Columbia University.) 26 III. AGENCY VIEWPOINT A. JUDGMENT AS TO EFFECTIVENESS OF PRESENT POLICY HEW feels that its present practice regarding patent matters is working reasonably well. In this connection it was stated: This Department has reached no conclusions as to whether greater flexibility of authority in the administration of Government-owned patents than now exists would facilitate or impede the realization of its research objectives. If, however, in the administration of more flexible authority the Department should be required to take into consideration objects extraneous to the research objective, the effect would be detrimental. In any event the building up of a system placing emphasis on patenting and the administration of patents would entail the setting up of extensive administrative machinery and personnel. See note 4 on p. 3. As has been indicated, the development of policy in this Department has been in the other direction. While the underlying purpose here has been to make fully, freely, and promptly available the fruits of research conducted or financially aided by the Department, with restrictions limited to those involving safety factors, it has fortunately coincided with more economical administration.27 B. RECOMMENDATIONS AS TO FUTURE POLICY None were offered. 27 See note 4 on p. 3. APPENDIX No. 1 MANUAL-GENERAL ADMINISTRATION Part 6-Patents and Inventions 6-10-00 Scope CHAPTER 6-10 REGULATIONS AND PROCEDURES 6-10-10 Regulations (from Federal Register of 9/14/55 and 12/4/57) Sec. [From Federal Register, Title 45, Subtitle A] PART 6-INVENTIONS AND PATENTS (GENERAL) Definitions. 6.0 6.1 General Policy. 6.2 Publication or patenting of inventions. 6.3 Government-owned patents; licensing; dedication to the public. 6.4 Central records; confidentiality. 6.5 Procedures relating to employee and grantee inventions. 6.6 Issuance of patents on non-fee basis; certification of public interest. PART 8-INVENTIONS RESULTING FROM RESEARCH GRANTS, FELLOWSHIP AWARDS, 8.7 Cancer chemotherapy industrial research contracts. HEW TN-21 (7/31/58). Supersedes page 1, Chapter 6-10 (TN-15). 48436-60 19 |